I’m not really one to get worked up about national news stories, but my ears definitely perked when I started hearing talk about the future of some US-based HVAC companies—in particular, how corporations like Carrier will manage inevitable increases in their production expenses over the next few years. While a lot of focus has been centered around how this will affect jobs, the most notable effect on consumers nationwide is sure to be price increases on furnaces and AC units. This news may be a little disappointing, especially at this time of year when everything seems to be going on sale. But, unlike an HDTV, there isn’t that same holiday rush to buy a new HVAC system to put under the Christmas tree. After all, it’s not like you can watch the next season of Game of Thrones on your new furnace.
While this might not matter to anyone who hasn’t heard a worrisome rattling from their heater lately that sounded like reindeer playing “Here Comes Santa Claus,” it may feel like pretty big news for anyone who’s just had an old unit give out in the midst of their holiday marshmallow roastings and light stringing. But don’t give up that holiday cheer just yet—those slightly higher prices might actually be a good thing in the long run. I know it sounds crazy, and even a little backward, but price increases are encouraging HVAC manufacturers to develop more energy efficient technology. You know, the kind that will save you money and help prolong the life of your future heating and cooling systems. And that, friends, is great news.
HVAC Prices Are Going Up
That new furnace is getting more expensive. At this point, it’s a fact. So the question everyone wants the answer to is, exactly why are they raising their prices? First, you should know that it’s not just one manufacturer, it’s industry-wide all over the country. It affects everyone, including us folks in Northern California. Carrier, Daikin, Lennox, and several other of the large HVAC manufacturers will all raise their prices between 3-6% around the first of the year because of cost increases from competitors, low demand from consumers, and decreased supplies of materials and fuel. Let’s break that all down:
- Increase in material prices: The price of metals has gone up across the board, making manufacturing costs more expensive for everyone in the HVAC industry. While this might seem alarming for manufacturers, it tends to be a cyclical increase, as the price of steel was at record lows just over a year ago. What does that mean for consumers? It means that just because materials are up right now doesn’t mean they will stay there, so there’s no reason to sweat this one.
- Increase in fuel prices: Steel prices can be volatile, going up and down with the market, but the cost of fossil fuels will continue to rise as scarcity increases. These prices are just gonna keep on going up. The positive result, though, is that manufacturers have taken scarcity of fuel seriously and are designing more and more efficient units that consume fewer fossil fuels. What that means for you is, the next unit you buy will be incredibly more efficient at using fuel than your old dinosaur, saving you money on that monthly bill.
- Low demand: This year has been unseasonably mild for most of the country in terms of cold weather, which means fewer people are buying furnaces and boilers, especially in areas like ours with such mild climates. This lack of demand has slowed production of HVAC equipment, which means when that demand goes back up, scarcity of product will dictate a lot of pricing. But thanks to all the crazy weather in the last few weeks, HVAC suppliers are already seeing an increase in sales. So folks that aren’t in desperate need of a new unit right now might find that by spring prices have stabilized. If you’re not in a rush, see if a maintenance call from your local HVAC professional can tide you over for a few more months or so.
Good Things Are Ahead Thanks to Higher HVAC Prices
Ok, bear with me. I want to compare your new furnace to organic produce. When “organic” became a buzzword, first we noticed how expensive it made any peach, plum, or pear with the label. Then, one by one, grocery stores all starting selling these overpriced fruits, competing with each other for selection. Over the years, the benefits of eating organically grown food have come to the forefront and many of us have integrated the extra costs into our budgets as well as diets. The prices might have come down a little, but even given the higher price stickers, it’s hard to argue that there’s no benefit to eating organic. And the same can be said for rising HVAC prices—they might actually mean a shift to heating and cooling systems that are healthier for our homes, healthier for our environment, and in the long run save us money.
Some of the positive effects of higher pricing are likely to be:
- More efficient technology: In my opinion, this is the most exciting and immediate change coming to the HVAC industry. There’s a real focus now on improving the efficiency of units so they use less electricity and, thanks to computers, this is becoming easier and easier. This sounds a little like sci-fi, but a lot of newer HVAC units have internal electronic systems that allow them to modify their own internal components, like fan speed and compressor speeds. Programs have also been developed that let individuals see how their unit is operating and change things like the temperature or the speed of the fan. You can even do this from a smartphone these days. So how effective is this technology in the average home? Statistics show that a higher efficiency unit can save you 20-30% on your energy bills each month. With the addition of smart controls like a smart thermostat, you can potentially save an additional 10-20%.
- Less dependence on fossil fuels: With prices increasing for fuel and furnaces alike, it’s even more important to buy an energy efficient system to offset initial costs. Going hand-in-hand with smart devices that help control and conserve the amount of fuel that a unit is consuming, attention is now on the types of fuel being burned. Manufacturers are slowly getting away from gas and oil guzzling systems, moving to greener options that rely on water, geothermal technology, and even solar panels. While these types of systems may not widely be available now, they will be in the near future as manufacturers switch to more renewable sources of fuel.
- Focus on passive and alternative cooling and heating methods: Passive cooling and heating techniques will definitely become more common in the HVAC industry. Some units already utilize passive methods by allowing mild outside air into buildings when it matches the desired indoor humidity and temperatures, using little to no energy. Geothermal heating systems are also gaining more and more traction with residential development as well, using heat stored below ground to warm a building. In the summer, the heat from the building is captured in the water piping and put back into the ground, circulating cooler water back up to the home, distributed as cool air. Whole building design is becoming more focused on passive methods to cool and heat homes too, just like in some of our historic Northern California homes, utilizing shading and natural ventilation.
Getting the Most for Your Money: What to Ask the Experts
While your unit might be showing signs of impending demise, the rising prices probably have you thinking twice about replacing it anytime soon. If your unit goes out completely, you may not have a choice about when you make your purchase, but with a little attention on maintenance, it may give you a few more years of service. So should you wait to buy new? To help you make that decision, contact a trusted HVAC professional and make sure to ask them the following questions:
- When might I see a return on investment for a high-efficiency unit? This is a tough question because there are lots of variables to factor in, some unforeseen, like future weather patterns. But based on a new unit’s efficiency rating and improved longevity thanks to design quality improvements, you should be able to get some idea of how it might save you money over the lifespan of the unit. This will vary according to brand and unit type, but as it’s clear all the brands are competing with each other price-wise, it’s likely they’ll have comparable technologies as well, with one that fits your needs.
What type of unit should I buy? Whether it’s a heat pump, furnace, or packaged unit, there are plenty of different heating equipment options to suit different climates and individual needs. Here in Northern California, for example, a heat pump or split system air conditioner is often a good choice for our mild but variable climate. The important thing is to find a unit with a high-efficiency rating upwards of 11 or 12 SEER that either has some level of smart control or is compatible with a smart thermostat so you are in control of the energy usage of your HVAC.
- Are there any additional costs I should consider? This is an important question to ask because a new HVAC unit may require other new components you may not think about that can really add to your upfront installation costs. For example, high efficiency furnaces are a great choice for heating, but remember that unless you live in a very cold climate year round, you’ll have to have some type of air conditioning coil paired with it for warmer months. Some packaged systems can incur a lot of costs from electrical components and additional ductwork, depending on the size of your home. These are all factors that need to be discussed prior to making a decision about a new unit.
With the holidays—and winter weather—upon us, keeping our homes warm and toasty is a priority. There’s no reason to let the HVAC industry put a damper on your holiday spirit. If you’re worried replacing your old furnace or air conditioner is going to strain your holiday budget, keep in mind there are reasons to be happy about HVAC’s economic changes.
Those higher material and fuel costs are the catalyst behind manufacturers taking a harder look at how efficient their units are. This means that in the long run, they’re going to start focusing on making units that use fuel more efficiently and require less electricity from the grid. Those units might cost a bit more upfront, but will save you money down the road. The even bigger picture is less energy usage overall, which is not only good for our individual households, but good for our entire planet.
The trusted, local professionals at Bell Brothers can help you make a decision about buying a new high efficiency unit at the right price and the right time, so if you’re in the market for a new HVAC system, give us a call today.